Building more financial reliability in 2021
Richard Scarborough and Michael Copeland share ways to put your practice on a sound economic setting as the new year begins.
This year will certainly have given practice owners plenty to think about when it comes to finding ways to strengthen their business in 2021.
The vulnerability felt by many during lockdown will undoubtedly lead to a decision to prioritise increasing their practice’s financial reliability.
Here are some ways you can do just that and strengthen your business for whatever the next 12 months brings.
Introduce patient finance
Offering patient finance can help to improve your cash flow and reduce your risk, as you receive the money from the finance provider up front before the treatment starts and the patient repays the bank over time. This is a boost during the best of times, but is even more welcome following a hardship.
Many practices who use Medenta patient finance have found that, as they have begun the road to business recovery, there is a wealth of patients keen to have orthodontic treatment funded via patient finance.
Having finance in place meant they were able to kickstart their cash flow as soon as the doors reopened and increased the likelihood of patients being able to say yes to the treatment.
Put a membership plan in place
A membership plan brings in a steady, guaranteed income to your practice. This allows you to plan ahead more easily and feel assured that you know what to expect every month.
This regular baseline of income also remains strong during times of crisis as well as when everything is running smoothly.
During lockdown, 98% of patients on a plan with our sister company, Practice Plan, continued paying their membership fees even when they couldn’t see their dentist.
Get on top of your financial position
Your practice’s financial health will be underpinned by having a strong understanding of your financial position.
Knowing how much you have, or are likely to have, where you have room to make investments and being able to anticipate any pressure points will boost your overall resilience and help you to plan ahead with greater confidence.
Start undertaking thorough, granular cash flow forecasts and ensure they’re regularly refreshed – ideally on a weekly basis.
The events of 2020 will have underlined the importance of protection cover, particularly to mitigate the potential financial impact of any sort of illness or injury.
Take the opportunity to review what cover you have in place. Think whether this is the right level for your practice’s needs.
This could include solutions such as a professional expenses plan. This can provide a monthly income to your practice if an employee became unable to work due to certain circumstances.
You can use money from a professional expenses plan to help meet your practice overheads. Alternatively, it could cover the cost of hiring someone else to carry out their role. This ensures that you can continue to deliver the high standards of service you offer your patients.
Whatever your protection requirements, it is critical that individuals understand exactly what their policies cover if they need to claim. Your financial consultant will be able to help you with this process.
These are just a few ways you can help to stabilise your finances. They will not only give you better peace of mind but also a stronger foundation for your practice. 2020 has been a hugely challenging year.
No one can know for sure what the next year will be like. However, putting measures in place to help you navigate these challenges can only be a good thing.
For further information on Medenta, call 01691 684175 or visit www.medenta.com.
For further information on Wesleyan, call 0800 980 2277 or visit www.wesleyan.co.uk.